agenda

Indonesian President Prabowo Subianto unveiled ambitious economic growth and fiscal deficit targets for 2027 while promising reforms aimed at restoring investor confidence and strengthening state institutions. The announcement comes after months of market concerns over government spending plans, policy uncertainty, and weakening confidence in Southeast Asia’s largest economy.

Government Sets Ambitious Economic Targets

Prabowo outlined a growth target of 5.8 percent to 6.5 percent for next year while aiming to lower the fiscal deficit to between 1.8 percent and 2.4 percent of gross domestic product. The government also expects inflation to remain under control and pledged to improve food security and attract greater investment.

Investor Confidence Faces Pressure

Indonesia has faced growing scrutiny from investors and rating agencies this year. Credit rating outlooks were downgraded due to concerns about policymaking credibility, fiscal discipline, and transparency. Market fears intensified after discussions around possible changes to the country’s long standing fiscal deficit ceiling and rising state spending commitments.

Commodity Control Plan Sparks Market Concerns

Prabowo confirmed plans to establish a new state agency to oversee exports of major commodities including coal, palm oil, and nickel. The government says the move is intended to reduce revenue losses and strengthen national control over natural resources, but investors worry it could disrupt pricing systems and reduce private sector profitability.

Private Sector Role Remains Important

Despite increasing state involvement in strategic sectors, Prabowo stressed that Indonesia still welcomes private companies and small businesses as partners in economic development. He called for cooperation between the government and the private sector to achieve long term prosperity.

Analysis

Indonesia’s latest economic strategy reflects a balancing act between ambitious state led development goals and the need to maintain investor confidence. While the government aims to accelerate growth and strengthen control over key resources, markets remain cautious about rising fiscal risks and unpredictable policy changes.

The proposed commodity export agency could significantly reshape Indonesia’s role in global resource markets because the country is one of the world’s largest exporters of coal and palm oil. However, stronger government intervention may create uncertainty for foreign investors and commodity traders.

At the same time, maintaining fiscal discipline will be critical as Prabowo moves forward with large welfare programmes and economic reforms. The success of his agenda will likely depend on whether the government can reassure markets while delivering growth, stability, and stronger institutional credibility.

With information from Reuters.

ASEAN leaders have begun meeting in the Philippines as residents near the summit venue say their main concerns are soaring fuel prices and living costs. The regional bloc enters what officials describe as a “stress test decade”, facing issues stemming from the Iran conflict since so many member states are heavily reliant on energy from the Gulf.

WASHINGTON — Polls show that record numbers of Americans think the country is on the wrong track. Anxious voters find no shortage of corroboration. Seeming proof of national decline is everywhere–the savings-and-loan bailout, an imperial Congress, overpaid executives at the top of underperforming companies, record murder rates in cities, declining school quality, an intractable drug epidemic, spiraling health-care costs and a flat economy riddled with deep pockets of regional recession. We haven’t felt good about ourselves, our country or our future since the Gulf War.

President George Bush’s decline in the polls mirrors this trend. As long as voters were concerned about foreign policy, his high standing compensated for lower ratings on domestic affairs. The Cold War’s end has changed the issue mix of presidential races forever.

The recession is an immediate problem, but that will decline in importance when the growth most economists predict resumes this spring. But the recession masks a deeper fear that our post-Cold War inheritance is a declining standard of living, with high-paying jobs and prosperity flowing overseas. That fear will not recede quickly.

With the recession ending by spring, campaign planners will be tempted to heave sighs of relief and run a status-quo candidacy against the uncertainties of a switch to the Democrats. That would be a serious mistake.

For Bush will never have more fertile ground to lay out a new GOP agenda that addresses the deep fear voters have about the future of America. He can capitalize on the public’s thirst for certainty by laying out a set of ambitious goals–in government, in jobs, in schools and in social progress.

He can start with government. A recent Gallup poll shows 20% blame Bush for the economy’s condition, but 54% blame Congress. Support for term limits and a Trumanesque campaign to fix what’s wrong with Congress will not only pay political dividends, but give him a governing coalition for a second term. Beginning with this week’s State of the Union, Bush should challenge Congress to pass his economic recovery program within 100 days and return it to him for signature. He should also push legislation on health-care reform, education and crime by similarly challenging Congress. To dramatize the push for excellence, he might consider national middle-class merit scholarships for college.

Nor should he give up on trade, despite the Japan trip. Presidential involvement in a few trade confrontations will make his claim to fight for American jobs more credible. Where unfair trading practices are found, executive action on import relief should be swift.

By establishing his vision for the post-Cold War future, contrasting his own activism with Democratic and congressional obstruction, showing that he thinks free trade should benefit us as well as our partners and fighting hard for the middle class–in essence charting a course the country thinks takes us in the right direction and gets us off the wrong track–he’ll win not only reelection but a mandate.

It’s also important to understand this is not the 1984 reelection. Compression of the primary calendar means there are fewer days between the first Iowa caucuses, Feb. 10, and Super Tuesday, March 10, and the Democratic winner-take-all rules could give a front-runner enough momentum to be the apparent nominee by April. There is little prospect for a protracted Democratic primary battle like 1984’s between Gary Hart and Walter F. Mondale.

Because the Democrats won’t be tearing each other apart as long, Bush should engage the Democrats early. But he needs to shore up his own vulnerabilities before he begins to contrast with the Democratic nominee. He needs to sharpen his middle-class message, starting with the economy and people’s fears about the future.

This should be done well before the summer Democratic convention, when the Democratic ticket will have a solid week of national television coverage to engage in Bush-bashing.

It’s also critical to understand this is not 1988. The Democratic nominee will also have learned a lesson from Michael S. Dukakis–define your candidacy before your opponent gets a chance to define it negatively for you. It’s highly unlikely the ’92 Democratic nominee will be kept on the defensive for months as was Dukakis.

This year’s presidential election takes place in politically uncharted territory. It is the first contest of the post-Cold War era, probably the last election with a World War II veteran running for President. World events, from Eastern Europe’s velvet revolutions of 1989 to last summer’s failed Soviet coup, have irrevocably reshaped America’s political landscape.

Foreign policy and defense no longer matter much to voters. Communism’s death also buried anti-communism as an issue. With few external threats, Americans see old relationships through a new prism. They supported the post-war alliance with Japan for mutual security; without the Cold War, that same relationship looks one-sided.

To win reelection, it’s critical to understand what this dramatic shift means. The old rules are gone–now is the time for a new political order in American campaigns. For four decades, we’ve elected presidents against a Cold War backdrop. Now that we’ve won the Cold War, we need a new presidential agenda that’s relevant for the ‘90s.

When Joe Biden launched his campaign for the presidency in 2019, his economic proposals were relatively modest updates of the middle-class-oriented agenda he championed as vice president under Barack Obama. “It doesn’t require some fundamental shift,” he said, pushing against the sweeping proposals of rivals like Bernie Sanders and Elizabeth Warren.

Then came the pandemic.

Today, Biden’s economic message, retooled to address current needs, has real urgency.

“We can’t wait,” he said last week. “There’s a lot of people who are in real, real trouble — a lot of people going to bed at night, staring at the ceiling wondering … if they’re going to be evicted.”

And Americans seem ready to spend to make things better. The huge $1.9-trillion pandemic relief bill Biden has proposed is wildly popular. A CBS News poll last week found that 79% of Americans want Congress to pass a bill as big as the one Biden proposed, including 61% of Republicans.

Biden isn’t stopping at pandemic relief. He’s also using the emergency to build support for the far broader program of economic reform he adopted midway through his campaign last year, including massive investments in manufacturing, technology, education and child care.

“We’re in a position to think big and move big,” he said.

He’s following the advice that Rahm Emanuel, then a member of Congress, offered during the financial crash of 2008: “You never want a serious crisis to go to waste.”

For Biden, that begins with the pandemic relief plan, a package that includes a $1,400 check for most adults, increased unemployment insurance, a child tax credit of up to $3,600 a year, $440 billion for state and local governments and $130 billion to help reopen schools.

And once that proposal is enacted, White House officials say, the president will turn to the broader, long-term economic proposals of his campaign, including a $400-billion “Buy American” plan to support manufacturing, $300 billion for research and development, more spending on clean energy and — if it doesn’t pass as part of the pandemic package — a $15 minimum wage.

It’s an ambitious agenda: a dramatic expansion of federal government spending to create jobs, especially in manufacturing and strategic technologies.

Biden’s economic populism is aimed, in part, at the same voters Donald Trump appealed to when he called for revitalizing American manufacturing and bringing jobs back home — but only in the sense that Biden, too, has promised to repair some of the damage wrought by the long decline in manufacturing jobs.

“A lot of white working-class voters thought we forgot them,” he said last year during a campaign tour of faded industrial towns in Pennsylvania. “I get them. I get their sense of being left behind.”

He’s kept a few of Trump’s policies, most notably the tough stance on trade with China. But the difference in the two populisms is illustrated by the predecessor each president chose as a model.

In Trump’s Oval Office, he hung a portrait of Andrew Jackson, the 19th century nationalist who warred with bankers on behalf of working-class white Americans but also supported slavery and pushed tens of thousands of Native Americans off their ancestral lands.

Biden replaced Jackson’s portrait with one of Franklin D. Roosevelt, the Depression-era Democrat who enacted Social Security, vastly expanded the federal government and was reelected three times.

If Biden’s economic agenda were being proposed by full-throated progressives like Sanders or Warren, it might sound extreme to many voters. But his long record as a relatively centrist Democrat could insulate him from that hazard, much as FDR’s aristocratic background allowed him to tack left.

“Voters view him not as a radical, but as a get-things-done moderate,” Biden’s campaign pollster, John Anzalone, told me. “Voters are incredibly transactional right now. They want help and they want it quick.”

Republican opposition to both parts of Biden’s agenda — the short-term relief plan and the longer-term reforms — has been muted so far, mostly because GOP leaders have been too busy with family quarrels over Trump’s legacy to offer much of an alternative to the president’s plans.

That’s unlikely to last. There will be plenty for conservatives to oppose soon enough, beginning with the $15 minimum wage and those new big-government economic programs — not to mention the increase in corporate taxes Biden has proposed to help finance it all.

But as the president nears the end of his first month in office, it’s possible to imagine that by the end of 2021 he could be claiming credit for a rebounding economy and pressing ahead with his broader proposals. If he succeeds, the Biden presidency could be transformative in a way even his supporters didn’t expect.